Author Topic: You need a lot of money to be happy (according to science)  (Read 2383 times)

WootWoot

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You need a lot of money to be happy (according to science)
« on: February 18, 2018, 10:38:06 AM »
https://www.sciencealert.com/how-much-money-you-need-be-happy-according-science-income-satisfaction-well-being

My best friend texted me the other day that she heard some poll results on the radio stating that you need at least $79K USD to be happy. Since she doesn't make anywhere near that amount and probably never will (and neither will I), the news depressed the hell out of her.

I really wanted to know more about this, so I Googled and found the above article. I know surveys/polls have been done on this in the past. What I don't understand is why this particular amount of money would make one happy. What are they asking these people?

The other one I've heard is everyone thinks if they just made 10% more money, they'd be fine.



Kimera757

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Re: You need a lot of money to be happy (according to science)
« Reply #1 on: February 18, 2018, 11:02:44 AM »
The $79,000 figure is an average. I doubt a single participant said they wanted exactly that much money to be happy. The part of the study I could read even mentioned that they controlled for demographics (age, where you live, etc). $79,000 per year won't go far in Los Angeles, for instance, but would go far in many parts of the US.

The quoted report is behind a paywall, and I couldn't figure out if they meant individual income or household income. $79,000 of household income, while above the median, is not ridiculously hard to get.

Quote
The other one I've heard is everyone thinks if they just made 10% more money, they'd be fine.
Income: $10,000 per year. Expenses: $9,999.99 per year. Result: Happiness.
Income: $10,000 per year. Expenses: $10,000.01 per year. Result: Misery.

I think it's this. Human beings think short term. The income figure has less impact on a human mind than on how much money is left at the end of the month. If their bank account and investment account is increasing in size, most people would be happy, as it implies security (you're not likely to go into the hole). Of course, that can be weak thinking (your emergency fund might be too small, so any little thing could drop you into the hole).

That's not a very Mustachian attitude, however. We think long term.

WootWoot

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Re: You need a lot of money to be happy (according to science)
« Reply #2 on: February 18, 2018, 11:15:01 AM »
I think my friend is living paycheck to paycheck or worse. She says she has never been good with money. I remember reading a book (don't recall which) that asked a lot of questions about your relationship with money. There was a statement: "I am not good with money". Then the book asked, "Is this true? Do you WANT this to be true?" Food for thought.

Dollar Slice

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Re: You need a lot of money to be happy (according to science)
« Reply #3 on: February 18, 2018, 01:08:33 PM »
Funny, I make exactly $79,000/yr salary. I guess I should be just barely happy? ;-)

Numbers like that are kind of meaningless since COL varies so much by location. $79k in Manhattan (where I live) is very, very different from $79k in Kansas or Florida or New Hampshire. The tax bite is high as well as the COL. (For me it makes sense because I absolutely love living in NYC. But a lot of folks would find this very stressful.)

WootWoot

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Re: You need a lot of money to be happy (according to science)
« Reply #4 on: February 18, 2018, 02:36:22 PM »
Around here, $79,000 for a single person would be fantastic. For a married couple with no kids, still fantastic (IMHO). We don't have a HCOL, except for rentals. I've been told that people from NY and NJ are buying up properties around here to rent out, and then charging quite a lot. Then again, "quite a lot" varies according to geographical location.

RFAAOATB

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Re: You need a lot of money to be happy (according to science)
« Reply #5 on: February 18, 2018, 04:36:38 PM »
https://www.sciencealert.com/how-much-money-you-need-be-happy-according-science-income-satisfaction-well-being

My best friend texted me the other day that she heard some poll results on the radio stating that you need at least $79K USD to be happy. Since she doesn't make anywhere near that amount and probably never will (and neither will I), the news depressed the hell out of her.

That sounds more depressing than the benchmark figure.  Why settle for topping out at such a low figure?  I'm above 70k now and if I was willing to work harder I could get close to 100k.  The money is out there, it's just a matter of how much you all want it.  I guess that's why the number is so low.  I'm comfortable enough and have too many demands on my time to make more money, so the 70s might as well be the happiness point for me.

Kyle Schuant

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Re: You need a lot of money to be happy (according to science)
« Reply #6 on: February 18, 2018, 04:49:40 PM »
Past basic needs, the usual survey results are that people are happy when they feel they're richer than their neighbours and friends.

RFAAOATB

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Re: You need a lot of money to be happy (according to science)
« Reply #7 on: February 18, 2018, 05:24:17 PM »
Past basic needs, the usual survey results are that people are happy when they feel they're richer than their neighbours and friends.

That and the secret to not feeling fat is to have morbidly obese friends.

Kyle Schuant

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Re: You need a lot of money to be happy (according to science)
« Reply #8 on: February 18, 2018, 05:42:45 PM »
That, too. In NSW a study was done asking doctors to look at pics of children and rate them as underweight, healthy, overweight or obese. The healthy and the overweight ones were rated as "healthy", and the obese ones as merely overweight.


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It's just what you're used to.

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Just Joe

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Re: You need a lot of money to be happy (according to science)
« Reply #9 on: February 19, 2018, 08:44:51 AM »
Its like everything else - statistics. If you do more MMM style with your money I suspect a person can be just as happy with less. For DW and I financial happiness came with security. Spare money sitting there accruing interest is a good feeling. I don't think either of us feel like we are missing out on life b/c we don't have the fancy house, fancy vacations or fancy things.

Laura33

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Re: You need a lot of money to be happy (according to science)
« Reply #10 on: February 19, 2018, 08:53:00 AM »
I suspect that, on average, $79K is the point at which people feel that they can cover all of their basic needs -- reasonable housing in a good neighborhood, reasonable food and transportation, health insurance and access to doctors -- and a sufficient number of their wants (shopping, the occasional vacation, ability to send kids on school trips, etc.). 

The part that I find intriguing is the consistent correlation with lower happiness rates as income increases above those levels.  I suspect that those higher-paying jobs may require more time/energy/sacrifices for starters.  But perhaps people who make more money also upgrade their lifestyles, which then increases the financial pressure on them to earn more to maintain that new lifestyle.